Trade Associations Seek FFIEC Guidance on TRID Enforcement

Eighteen trade associations have asked the Federal Financial Institutions Examination Council (FFIEC) to provide clear guidance on its plans to investigate and enforce the TILA/RESPA Integrated Disclosure Rule (TRID) in the early months after implementation.

“In official issuances and communications to Congress, the Consumer Financial Protection Bureau (CFPB) recognized that the TRID rule poses ‘significant implementation challenges’ for industry, and has indicated that regulators will be sensitive to the good-faith efforts of lenders to comply with the TRID requirements in a timely manner,” the group wrote in a letter to the agency in September. “However, we believe that without formal guidance, fear of enforcement actions for errors committed in good faith will severely constrain consumer access to needed mortgage credit.”

In the letter, the associations urged the FFIEC to provide needed certainty by articulating precise policies for examining and supervising financial institutions for the initial months after the TRID implementation date.

“The TRID rule is unique in scope and complexity, and it affects every stage of the mortgage origination process, beginning before the consumer applies for a loan and continuing beyond the settlement process,” the letter stated. “Transitioning to the new TRID regulatory framework is a sea change for every participant in the mortgage lending process: borrowers, lenders, appraisers, agents, brokers, builders, investors and other service providers. Industry stakeholders have undertaken extensive efforts to comply with these rules, but, even now, they are discovering significant compliance issues. These discoveries raise liability concerns that cannot be realistically resolved before the October 3 deadline, as many will require formal authoritative guidance.”

The association recommended that the FFIEC formally implement a clearly articulated transition period that addresses how regulators will oversee and examine regulated institutions for TRID compliance during the transition period.

“We ask that FFIEC recognize the severe penalties that can arise under these new rules, and establish predictable regulatory restraint by enunciating clear guidelines that, if met in good faith, would afford institutions with enforcement and examination relief for a reasonable time period following Oct. 3,” the letter concluded.